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7 Reasons Sellers Need To Get More Competitive To Sell A Home In Pensacola

People who are trying to sell their Pensacola homes need to understand how competitive this market is. This article will help sellers understand why there are so few buyers in this market.

If you haven’t noticed, the Pensacola real estate market is in the dumps. It seems the only winners are the buyers who are getting good deals on homes, and there aren’t nearly enough of them to make this a decent market. On a bright note, the Pensacola real estate market dropped below the 7000 active listings mark this week. As of today, there are 6974 active listings. This primarily means that sellers with overpriced homes are leaving the market. It’s not that the homes are starting to sell. Read more about the Pensacola market numbers last month in my post on Pensacola Real Estate Market Data – October 2007. The reasons for the down market are the same all over the country, not just in Pensacola. But they apply to Pensacola as much as anywhere.  Namely, there are

Too Few Buyers in the Pensacola Real Estate Market!

And this may not be changing any time soon. Here are 7 reasons we have so few buyers in the Pensacola real estate market.

1. Bought when the market was hot. Many buyers who bought when the market was hot now owe more on their home than the home will sell for. They will not be able to sell until the market kicks back up and they recover some value. This is what we call being upside down. For example, if the mortgage balance is $250K, but buyers won’t pay more than $200K for the home, the seller is upside down. Why should buyers pay $250K? There are plenty of bargains out there.

 Karl_Flip_Pool2_RS300If you want to sell your home,
you must be the best bargain in your neighborhood.

Since these upside down sellers will end up waiting until market conditions improve and then just put their homes back on the market, we are looking at a long long wait before the inventory of homes in Pensacola gets back to a normal level. (That’s me, upside down, but feeling good about it. I landed on my back. Ouch!)

 2. Foreclosed upon. Pensacola has plenty of foreclosures to go around.  Anyone who has experienced foreclosure will not be a potential buyer for several more years, at a minimum.

3. Refinanced. Similar to those who bought when the market was hot. Many people took the opportunity to refinance their homes and take out some of that equity in cold hard cash. These people are also stuck in their home until the market corrects. See #1 above.

4. The mortgage crisis. This crisis is preventing many would-be buyers from qualifying for a loan. But aren’t underqualified buyers part of the reason we got into this mortage crisis anyway? And what about buyers that do qualify for a loan? Higher down payments are now required, and many buyers don’t just have $20,000 or more sitting around in the bank.Buyers with great credit can still get 90% and 100% loans, but how many of those buyers are out there?

5. Hurricanes. We haven’t seen one for a couple of years, but apparently no one has forgotten. Check my Hurr_Ivan_Sept14post on the current real estate market on Pensacola beach properties. Not much is selling out on Pensacola Beach or Perdido Key these days.  That’s Ivan in the picture. He was not very nice to us, but he did wonders for the Pensacola real estate market, if you were a seller.

6. High Insurance Rates. Some say rates may be dropping a little bit, but rates are still so high they are preventing many buyers from being able to qualify for a mortage. Add on a couple of hundred dollars to each house payment and see how many buyers drop out of the qualifying ranks.

7. Where are the great Pensacola jobs? We hear reports of possible software development companies moving into the area, but I wonder how soon. And how much help will that really bring. Remember that 4 letter word BRAC (stands for Base Realignment And Closure). It seemed that Florida overall did pretty well in the last round of BRAC cuts, but Pensacola did not. Pensacola will be losing over 500 good paying jobs from the Defense Finance and Accounting Service (DFAS) within the next couple of years.

Great jobs don’t seem to be a problem in Mobile. Check out this article on the new German Steel Mill coming to Mobile. Talk about an economy-stimulating event. Why can’t our Pensacola leaders at least get us some kind of decent employment opportunities around here? Until something changes, the Pensacola real estate market is likely to remain very dismal for a very long time.

Sellers must price competitively to sell in Pensacola in this market.  Otherwise, they are just wasting their time and efforts.

Click on Pensacola Real Estate News for a complete list of articles indexed by category.  

  1. Sandra

    In the Austin area, we are just now starting to suffer the effects of what you wrote in this post. Our conversations with our sellers are much different today than they were this summer.

  2. Karl

    Sandra,

    I thought Austin was one of the markets that was doing better than everywhere else. I guess most everyone is going to suffer some from this downturn. I think you have a much stronger job base out there, so it might not be as severe. Thanks for writing.

    Karl

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